Punch Gains for Fifth Day as Bank Sells Admiral to Cerberus

Jan. 4 (Bloomberg) -- Punch Taverns Plc, the owner of more
than 4,500 U.K. pubs, gained for a fifth day in London trading
as Cerberus Capital Management LP bought Admiral Taverns Ltd.
from Lloyds Banking Group Plc.

Punch shares rose as much as 36 percent, the biggest
intraday gain since August 2011, and were up 8.6 percent to
10.75 pence at 4:20 p.m. local time, extending their gain to 45
percent since Morgan Stanley said Dec. 28 it had raised its
stake in the Staffordshire, England-based company to 12 percent.

Cerberus paid about 200 million pounds ($320 million) for
Admiral’s pub business, according to three people with knowledge
of the deal, who asked not to be identified because the terms
are private.

Lloyds took a stake in Hitchin, England-based Admiral in
November 2009 as part of a financial restructuring in which much
of the company’s debt was written off. HBOS Plc, which Lloyds
acquired in January 2009, had lent Admiral about 850 million
pounds. Admiral operates 1,100 pubs.

Punch started talks with some of its biggest investors and
bondholders last year on the possible options available for
restructuring its securitization, it said Oct. 24. It sold 475
pubs in the fiscal year ended Aug. 18 and wants to reduce the
number of pubs it owns to 3,000.

The five-day share gain is the largest since 2009. The
volume of shares traded was more than 9 million, over 13 times
the three-month daily average. The current share price is 51
percent above the average 12-month price target of 7.1 pence of
seven analysts tracked by Bloomberg.

That price target is equivalent to the value of its 50
percent stake in Matthew Clark, a U.K. drinks wholesaler,
according to Douglas Jack, an analyst at Numis Securities Ltd.
That implies the restructuring would wipe out any remaining
value from the pub business in the equity, Jack said in an
interview.